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It is a disaster larger in size than Chernobyl and two-times more damaging than the Exxon-Valdez spill. Between 1964 and 1992, a unit of U.S. oil company Texaco pillaged the frontier town of Lago Agrio and the surrounding areas nestled close to the Ecuadorian Amazon. The multinational, the indigenous in the area say, spilled over 18.5 billion gallons of highly toxic waste into 600 open, unlined pits over 2,000 square miles among an indigenous community of 30,000, pumping over 1.5 billion barrels of oil out of Ecuador. What it left behind was the legacy of "development:" a community sick and brought to the brink of collapse, a delicate ecosphere wrecked. The after-effects linger. Well water bubbles up brown, the soil is unmanageable and the life is in shambles. Cancer rates for men were 40% higher than normal and 60% above normal for women in the area in the years after the toxic dumping began and babies are born with birth defects. (1) A 1987 earthquake that ruptured 25 miles of the Trans-Ecuadorean pipeline running along the Amazon's indigenous communities only worsened the environmental disaster in Ecuador. That pipeline had ruptured 27 times by 1989, spilling 16.8 million gallons of crude -- compared to 10.8 million gallons spilled by the Exxon Valdez (2).
Over the decade since Texaco left, the region's indigenous have been fighting in U.S. and Ecuadorian courts to make the oil giant pay for the health and environmental damages the company's illegal drilling practices caused. The lawsuit brought against ChevronTexaco, which formed following a merger of Texaco Corp. and parent company Chevron in 2001, by 88 people on behalf of the community of 30,000 is unprecedented.
Steven Donziger, the lawyer for the group bringing the suit, told the Financial Times on Oct. 29: "This trial is one of the most extraordinary in the history of the indigenous movement in Ecuador and Latin America. It is the first major trial about environmental damage in which a multinational American defendant has shown up to defend charges with a court order from the US hanging over its head." After escaping making a decision in August 2002, a U.S. court decided that the trial, which has been stalled for nearly a decade now, should be opened in Ecuador. The court ruled that any judgment against ChevronTexaco would be enforceable in the US.
Western mainstream media have characterized the move as a shock to ChevronTexaco and the larger oil industry. But in fact, over the decade the trial bounced through U.S. courts, the oil company pushed hard for the move to Ecuador when it wasn't calling for an outright dismissal of the case. Why? ChevronTexaco was merely following an old corporate trick of trying to change venues to developing nations that lack the resources and experience to handle the case. Ecuador's courts have never tried a case involving environmental damage by an oil company. By moving the case to this inexperienced, oil-revenue dependent developing country, the chances for victory are greater and the potential loss of assets less. The trial, now in Ecuador, is more than a symbolic example of the dire effects of "development" and "globalization." The world is learning with each passing year this trial is delayed the staggering extent to which ChevronTexaco has strategically evaded its responsibility to repair the damage it has done.
The 1993 lawsuit brought against the multinational estimated it would take about $1 billion and as much as 10 years to undo decades-long damage. In reality, such an amount wouldn't begin to pay for repair and recovery for this community and land that has been brought to the edge of collapse. After conducting several studies of the land and the people, lawyers for the indigenous now estimate the real clean-up costs at between $5 billion and $6 billion. (3) ChevronTexaco, which "invests" $4 billion annually in all of Latin America, is fully using its blame-shifting tricks to escape accountability and payment.
The corporation has repeatedly said that Petroecuador, the state oil company and partner in the project, should be held responsible for the tragedy. Such an assertion is nothing short of ridiculous given that ChevronTexaco was one of the first companies to open up Ecuador's nascent oil industry and build its infrastructure. The company used its expertise, its equipment and filled its coffers during the "development" but now argues that it shouldn't pay for the "toxic legacy" it has left behind. Although an investigation into Petroecuador's compliance with Texaco's practices is in order, Texaco was obligated to comply with oil industry standards in place at the time. The standard since the 1950s has mandated toxic waste byproducts of drilling be reinjected into the ground, not dumped in open pits. (4)
ChevronTexaco also insists that it acted within Ecuadorian laws. The oil giant is arguing a moot point given that it couldn't have been obeying environmental laws not yet fully established. ChevronTexaco is violating its human rights obligations and international law and has been evading court action using stall tactics and hiding behind legal technicalities. Oil-related refuse and contaminants in the water around where Texaco drilled significantly exceeded internationally- recognized safety limits, sometimes by more than 1,000 parts, a 1993 study found. One year after Texaco became involved in Ecuador's new oil industry, 100 countries, including the U.S. and Ecuador mandated in the Stockholm Declaration the right to a clean and healthy environment was a fundamental and inalienable human right. (4a)
Texaco knowingly used shoddy extraction and waste disposal practices to save money and when given the option of lining the pits, the company chose not to, arguing that using such safety measures would take away from its millions of dollars in profits. The toxic dumping has led to an explosion of eight different types of cancers among the indigenous groups in that part of the Amazon. According to an internal letter written by a Texaco manager in 1980:
"The current (unlined) pits are necessary for efficient and economical operation of our drilling ... operations. The total cost of eliminating the old pits and lining new pits would be $4,197,958. ... It is recommended that the pits neither be ... lined nor filled."
Presenting the company as a riddle has been another trick of the multinational. The oil giant says it cannot be responsible for what the latter half of its moniker did because the companies didn't merge until 2001 and the suit itself was brought in 1993. Despite happily taking on Texaco's assets (liquid cash, shareholder stock, etc) after the merger, ChevronTEXACO refuses to take on Texaco's liabilities. The use of faulty logic extends to the company's declaration that there is no "scientific evidence" of harm done to the five indigenous communities that live in the area where the company drilled. After trying to have the case dismissed throughout the early 1990s, ChevronTexaco made a deal with the Ecuadorian government to pay $40 million for clean up --- despite the billion dollars environmentalists said (even then) it would take to repair the damaged Amazon wetlands. The clean up effort fell far short as over 60% of the pits still ooze toxic waste.
"If Texaco had done the same in the United States, they would all be in prison," Rene Vargas, a former energy minister, has said. This is exactly the point. The trial is not in the U.S., where lawyers for the indigenous hopelessly fought to keep it. It is in a country that relies on oil exports for 40% of its yearly revenue; a country with a severe debt burden and a recently, partially, de-nationalized oil industry. Ecuador's government is hungry for private investment, hungry for a $42 million IMF loan installment of a $205 million aid agreement hanging in the balance, and it is hungry for more foreign direct investment to sustain its "development."
Oct. 29 marked the end of the "proof stage" of the civil trial. The trial now lies in the hands of a court pitted in between the Ecuadorian government eager to lure further international investment and the indigenous communities that --- ironically given the policy reversals of President Lucio Gutierrez's regime --- helped support its rise to power.
Gutierrez won the presidency in the November 2002 elections, beating out billionaire banana magnate Alvaro Noboa with promises of social justice and an end to corruption. Gutierrez led the indigenous uprising against notoriously corrupt President Jamil Mahuad in 2000. However, since his hugely popular election and his initial appointments of indigenous leaders to his cabinet, Gutierrez has changed course with his "economic austerity program" to woo the IMF and its Washington cohorts.
The Gutierrez government signed a letter of intent with the IMF that proposes loans in exchange for policies which:
"raise the price of gas, privatizes some businesses, weakens worker protections, places the country in greater debt, marginalizes the basic needs of education and health, and turns Ecuadorian territory into part of the United States system of military bases," said Blanca Chancoso, representative of the Ecuador Federation of Indigenous Nationalities, CONAIE. (5)
The growing political tension between the indigenous and Gutierrez, along with lax environmental laws, a corrupt judiciary and a country in economic crisis all could work in favor of ChevronTexaco. The success of the multinational depends not on the evidence, which solidly supports the damage it caused to a community over decades. Success depends on delays in trials, on legal technicalities and media distortions of the meaning of "success." An indigenous victory means little if payments can't be enforced or are inadequately low compared with the damage done. But the implications of the case should not be understated. If the indigenous win the ruling, communities around the world ravaged by profit-hungry multinationals uprooting their land and their lives will be able to bring legal cases against them.
On paper, even environmental groups say that the indigenous have a good chance of getting a fair trial. The judge hearing the case, Alberto Guerra, has a good record and the trial has the backing of the U.S. courts. But in the context of a struggling Ecuadorian economy, the outlook for an indigenous victory is less certain.
Ecuador's government hopes investments in the country's oil industry to reach $1 billion in 2004 "in the least optimistic scenario" thanks to newly opened bidding for 5 new plots of the Amazon for drilling to foreign oil companies. These companies have already told President Lucio Gutierrez's government that "unresolved environmental issues" complicate their "business opportunities." Government officials have said the country needs to devote 40% to 45% of its budget to debt servicing in order to get stay afloat and not risk another default on its loan obligations, as in the early 1990s. The implications, then, of a ruling against a foreign investor in the oil sector are obvious. (6)
The indigenous of Ecuador's Amazon await a verdict, which activists say may not come for another decade. Until then, they wait, living among the dirtied water they use to fish and drink and the toxic soil they use for their livelihood.
C.P. Pandya is a freelance journalist based in the United States and can be reached at cppandya80@yahoo.com
(1)Amazon Watch study: "ChevronToxico: Clean Up Your Toxic Legacy In The Ecuadorian Amazon"
(2) Allen Gerlach, "Indians, Oil, and Politics: A Recent History of Ecuador". SR Books, 2003, pg. 57.
(3)Wall Street Journal (10-29-03): "Chevron Texaco Faces Big Tab For Cleanup"
(4)Amazon Watch report: "ChevronTexaco's Deadly Deceptions About Ecuador"
(5)Narco News (9-08-03): "Ecuador's President Is a Puppet of the World Bank: Interview With Blanca Chancoso"
(6)Dow Jones Newswires (10-30-03) "Foreign Cos Plan To Skip Ecuador's Oil Field Auctions
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